October 23, 2017

Colorado Court of Appeals: Laches is Available as Defense to Long-Overdue Maintenance Award

The Colorado Court of Appeals issued its opinion in In re Marriage of Kann on Thursday, July 13, 2017.

Post-Dissolution of Marriage—Laches as a Defense to Collection of Spousal Maintenance Arrearages and Interest—Implied Waiver and Estoppel.

A decree of dissolution of marriage between husband and wife was entered in 1989. Husband agreed to pay wife lifetime maintenance of no less than $1,200 per month. In the event of breach, the prevailing party would be entitled to recover costs, expenses, and reasonable attorney fees. For the next 26 years, husband never paid maintenance and wife never asked him to do so.

In 2015, wife retained counsel and sought entry of judgment for $520,636.32—$289,200 in unpaid maintenance and $231,436.32 in interest. She also requested a maintenance modification if the court did not award her the full judgment. Husband raised the affirmative defenses of waiver, estoppel, and laches. He also requested that the court terminate his maintenance obligation if it awarded wife the full judgment. The trial court (1) concluded that husband was required to pay maintenance under the decree; (2) held that Colorado law does not recognize the laches defense; (3) found that husband had failed to meet his burden of proof on the waiver and estoppel defenses; and (4) enforced the full judgment against him. The court also decreased the maintenance going forward to $800 per month and awarded wife attorney fees as the prevailing party under the separation agreement.

On appeal, husband argued that he should have been able to raise laches as a defense. While a novel issue in Colorado, courts have addressed the issue as to child support and child support combined with maintenance. Based on these cases, the court of appeals concluded that laches is available as an affirmative defense when a party seeks maintenance arrearages as well as the interest on those arrearages. The court remanded for the trial court to reconsider the full scope of the laches defense on the existing record.

Husband also challenged the rejection of his implied waiver and estoppel defenses. The record supports the trial court’s rejection of husband’s waiver argument. As to estoppel, husband asserted that he proved all four elements. The trial court rejected this defense, finding that (1) husband understood his obligation to pay maintenance; (2) wife never told him that he did not have to pay; and (3) husband did not detrimentally rely on wife’s assertion that she would not collect maintenance. The court found no basis on which to disturb the trial court’s rejection of the estoppel defense.

Husband further argued that it was error to modify rather than terminate his maintenance obligation. The court could not resolve this issue because the propriety of the trial court’s order will depend whether it awards the wife none, part, or all of her request for maintenance arrearages plus interest.

The portions of the trial court’s order rejecting husband’s laches defense, awarding attorney fees to wife as the prevailing party, and modifying husband’s maintenance obligation were reversed. The case was remanded for the court to consider whether laches bars wife’s entitlement to maintenance interest or arrearages and, based on this determination, to then reconsider the maintenance and attorney fee awards as well as wife’s claim for appellate attorney fees. In all other respects the order was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Statutory Maintenance Guideline Formula Advisory, Not Mandatory

The Colorado Court of Appeals issued its opinion in In re Marriage of Vittetoe on Thursday, May 5, 2016.

Dissolution of MarriageMarital PropertySeparate Property—Gift—MaintenanceGuideline.

In this dissolution of marriage proceeding, the primary issues at the permanent orders hearing concerned the division of the marital estate and wife’s maintenance request.

On appeal, wife contended that the district court misclassified a home as marital property and thus erred in including it as part of the marital estate. Specifically, wife argued that the home was her separate property by virtue of a resulting trust, or, alternatively, that the home was a separate gift and the court should have divided only the marital increase in value. Wife’s mother (mother) lived in the home throughout the parties’ marriage, and her 1977 will stipulated that her real property be held in trust and “used in the manner that is most beneficial to my children.” In 2005, mother recorded a quitclaim deed that listed herself and wife as joint tenants. When mother died, the home passed to wife. Wife argued to the district court that in executing the quitclaim deed, mother intended for wife to hold the home in trust for the siblings but did not intend for wife to obtain any beneficial interest in the home. There was sufficient evidence in the record to support the district court’s conclusion that no resulting trust formed and that mother intended for wife to take a beneficial interest in the home. However, the district court’s findings on whether the home was a gift are insufficient. The case was remanded for reconsideration, directing the district court to make specific findings, by clear and convincing evidence, on whether the home was a gift to the marriage or wife’s separate property, and further findings consistent therewith, if necessary.

Husband’s sole contention on cross-appeal was that the district court erred when it awarded wife maintenance in an amount that exceeded the statutory “cap” under C.R.S. § 14-10-114(3)(b)(I). Husband asserted that the plain language of the statute prohibited the court from entering a maintenance award that exceeded 40% of the parties’ combined monthly adjusted gross income. By describing the guideline formula as advisory and not presumptive, and by requiring the district court to consider other financial factors before awarding maintenance, the General Assembly indicated that it did not intend to “cap” the amount of maintenance available to a spouse. Therefore, under the new maintenance statute, the district court must consider the guideline formula and make findings concerning the relevant factors cited in the statute. After it has done so, the court, in its discretion, may award maintenance that exceeds the guideline formula amount if appropriate under the circumstances.

The judgement was affirmed in part and vacated in part, and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Student Loan Debt Improperly Characterized as Income for Maintenance Determination

The Colorado Court of Appeals issued its opinion in In re Marriage of Morton on Thursday, January 14, 2016.

In this dissolution action, husband and wife were married for approximately six years. During the marriage and after the parties separated but before permanent orders entered, wife attended school to become a radiological technologist and later took a sonogram course. She took out student loans for her schooling. In dividing marital property, the trial court concluded that wife’s student loan debt was her separate debt because it was incurred after the parties’ separation and it was not “fair or equitable” to treat the debt as marital. Wife contended this was an abuse of discretion, and the court of appeals agreed, finding any debt incurred during a pre-decree separation was marital. The court remanded for the district court to first treat the student loan debt as marital and then decide equitable distribution as part of the overall property distribution.

Wife also contended the trial court erred by considering her student loans a financial resource in determining the maintenance award, and the court of appeals again agreed. By considering the loan proceeds as income, the trial court ignored the need for the loans to be repayed with interest. The court determined that by allowing loan proceeds to be counted as income, the trial court thwarted the purpose of the maintenance statute. The court of appeals remanded for reconsideration of the maintenance award without considering the student loans as a financial resource or income of any kind.

Wife further contended the trial court erred in determining the maintenance award before fully dividing the parties’ marital and separate property, and the court of appeals again agreed, noting that the maintenance award depends on its findings and order dividing property. Without first dividing the property, the court cannot reasonably determine the requesting party’s maintenance needs.

Because the court remanded on the issues of maintenance and the division of marital property, it set aside the trial court’s attorney fee award. On remand, after dividing property and determining a maintenance award, the trial court could reconsider an award of attorney fees. The court of appeals instructed the trial court to base its decision on the parties’ financial circumstances at the time of remand.

Colorado Court of Appeals: Foreign Judgment Must Comport with United States Law Prior to Enforcement

The Colorado Court of Appeals issued its opinion in In re Marriage of Lohman on Thursday, September 24, 2015.

Dissolution of Marriage—Foreign Judgment—Personal Jurisdiction—Uniform Interstate Family Support Act—Due Process—Support Order.

Husband and wife (a native of England) married in Colorado in 1997. Their child was born the following year. Wife moved back to England with the child in 2008 after the parties’ separation. Husband remained in Colorado. Wife petitioned for divorce in England and served husband in Colorado. Husband did not respond or participate in the English court, which entered judgment against husband for £638,000 (approximately $1,010,911). Wife then filed a notice of registration of foreign support order with the Grand County District Court, which sustained the notice of registration and ordered enforcement of the English judgment.

On appeal, husband contended that for purposes of enforcement by a Colorado court, the English court lacked personal jurisdiction over him and, therefore, the English judgment cannot constitutionally be recognized. Pursuant to the Uniform Interstate Family Support Act, the district court was required to determine not only whether the English court had personal jurisdiction over husband under the laws of England, but also whether enforcement of the English court’s order by a U.S. court was permissible under the Due Process Clause of the U.S. Constitution. Accordingly, the district court was required to adjudicate whether husband had sufficient minimum contacts with England to render constitutional (under U.S. law) the assertion of jurisdiction over him by the English court. Because the district court did not do so, its orders were reversed.

Husband also contended that the district court erred in determining that the portion of the English judgment awarding wife £423,000 to purchase a home constituted support rather than a transfer or award of property. The court’s finding that the English judgment represented a support order, rather than a property equalization payment, was not clearly erroneous and may not be overturned.

Summary and full case available here, courtesy of The Colorado Lawyer.

HB 14-1379: Clarifying the Applicability of Prior Statute in Claims for Spousal Maintenance Filed Before January 1, 2014

On April 15, 2014, Rep. Beth McCann and Sen. Andy Kerr introduced HB 14-1379 – Concerning Clarifying the Application of Spousal Maintenance Statutes. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill clarifies that the spousal maintenance statute as it existed prior to January 1, 2014, governs claims for maintenance in dissolution of marriage and other actions filed prior to January 1, 2014.

The bill clarifies that, in addition to remarriage, maintenance also terminates upon the establishment of a civil union by the party receiving maintenance.

The bill was approved by the House on April 28. The Senate Judiciary Committee approved the bill on April 30, and on May 2 the bill was approved on 2nd Reading in the Senate.

Since this summary, the bill passed 3rd Reading in the Senate, unamended, and will go next to the governor’s desk.

Colorado Court of Appeals: Wife’s Nondisclosure of Income Not Material so Termination of Maintenance Denied

The Colorado Court of Appeals issued its opinion in In re Marriage of Dadiotis on Thursday, March 17, 2014.

Post-Dissolution of Marriage—Termination of Maintenance.

In 2004, after husband failed to appear for a permanent orders hearing, the district court ordered him to pay wife maintenance of $1,000 per month until her death or remarriage. In 2008, before a hearing on husband’s motion to modify maintenance, the parties stipulated husband would pay wife $750 per month for ten years and this would not be changed for any reason. The trial court approved the stipulation and adopted it as an order in 2009.

In 2012, husband discovered income reported by wife’s betting business but not revealed during the 2008 proceedings. He filed a motion to terminate maintenance, alleging failure to comply with CRCP 16.2(e)(10). Following a hearing, the district court denied the motion, finding wife’s nondisclosure was not material because husband had participated in the betting business and was aware of its income and expenses.

The Court of Appeals first considered whether husband’s maintenance should be terminated because wife did not fully comply with CRCP 16.2(e)(10). The Court held that Rule 16.2(e)(10) does not apply to husband’s motion to terminate maintenance and therefore affirmed. The rule’s five-year reach-back provision only permits the court “to allocate material assets or liabilities, the omission or nondisclosure of which materially affects the division of assets or liabilities.” It does not apply to re-determining maintenance.

The Court also considered whether husband’s maintenance should be terminated because he materially relied on wife’s fraudulent conduct. The Court found that wife’s conduct was not fraudulent and therefore affirmed.

Summary and full case available here.

Colorado Court of Appeals: Arbitration Award Must Be Confirmed by Trial Court if Not Timely Appealed

The Colorado Court of Appeals issued its opinion in In re Marriage of Rivera on Thursday, February 28, 2013.

Dissolution of Marriage—Arbitration Award—CRS §§ 13-22-222(1) and 14-10-128.5(2).

In this dissolution of marriage proceeding, husband appealed from the trial court’s order partially confirming an arbitration award as to property and maintenance provisions and ordering a hearing on the remaining parenting issues. The order was reversed and the case was remanded with directions.

Husband and wife agreed to resolve the terms of their dissolution of marriage through mediation and arbitration. At mediation, they agreed to joint decision-making authority and adopted the parenting schedule recommended by the child and family investigator. The parties agreed the mediator would be designated as an arbitrator to resolve any dispute arising out of the mediated agreement.

The parties then disputed the property distribution provisions in the mediated agreement and proceeded to arbitration. The arbitrator entered a final award, which reaffirmed the parenting time agreement. Wife then filed a motion requesting trial court confirmation of the arbitration award under CRS § 13-22-222(1), and husband objected on grounds not relevant to the appeal. The court held a hearing wherein husband withdrew his objection, and both parties requested the mediated agreement and arbitration award be made orders of the court.

Following a colloquy with wife, the trial court determined that wife did not believe the mediation agreement was fair and therefore stopped the hearing, declined to confirm the arbitration award, and set a permanent orders hearing. Husband then moved to confirm the arbitration award under CRS § 13-22-222(1). He stressed that because neither party had timely sought to vacate, modify, or correct the award, the court was required to confirm it. Wife agreed, but objected as to the provisions concerning parenting issues. The court entered an order confirming all property and maintenance provisions, but ordered all parenting issues remain set for hearing. Husband appealed.

Husband argued that because he and wife resolved the dissolution through arbitration and wife did not seek to vacate, modify, or correct the arbitration award in a timely manner, the trial court lacked authority to set a permanent orders hearing to resolve parenting issues. The Court of Appeals agreed. CRS § 14-10-128.5(2) provides a specific means by which a party may seek trial court review of an arbitration award. The motion for a hearing must be made no later than thirty-five days after the date of the award. Here, no such timely request was made. Accordingly, the order was reversed and the case was remanded to confirm the award in its entirety.

Summary and full case available here.